Nigeria’s poverty rate increased to 63% in 2025, despite a drop in inflation, indicating that recent macroeconomic reforms had a limited impact on household well-being, according to the World Bank.
The bank announced this in its Nigeria Development Update (April 2026), headlined “Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development,” which was released in Abuja on Tuesday.
According to the research, the proportion of Nigerians living below the poverty line climbed from 56% in 2023 to 61% in 2024, peaking at 63% in 2025.
The growth in the poverty rate to nearly 140 million Nigerians happened when inflation began to drop throughout the period, demonstrating a contradiction between price moderation and real
Chronicle NG gathered that Nigeria’s headline inflation rate declined sharply from 34.80 per cent in December 2024 to 15.15 per cent in December 2025, representing a drop of 19.65 percentage points, according to data from the National Bureau of Statistics.
Similarly, food inflation declined from approximately 39.84 percent in December 2024 to 10.84 percent in December 2025, representing a sharp 29 percentage point drop during the period.
The sharp decrease in both headline and food inflation is due to lessening pricing pressures and base effects following the CPI rebasing, while the previous rise had already damaged household buying power.
The World Bank explained that, while inflation, particularly food inflation, fell dramatically, it remained high enough to erode buying power and undermine living conditions for many households.
It stated, “Household incomes have not grown fast enough to offset still-elevated inflation, and poverty has yet to begin declining.”
According to the research, the continuation of poverty reflects the cumulative impact of previous inflation spikes, which undermined real incomes prior to the recent price reduction. As a result, the reduction in inflation has been insufficient to restore these welfare losses.
The bank also observed that global shocks, particularly the Middle East crisis, led to growing living costs by increasing oil, food, and transportation prices. It stated that these developments are “adding pressure to inflation and poverty, including via food prices,” exacerbating the situation for low-income households who spend a considerable portion of their income on basic necessities.
Beyond inflation, the nature of Nigeria’s economic growth has hampered poverty alleviation. The report found that growth has been mostly driven by services and industry, while agriculture, which employs more than half of the poor, has lagged behind.
“Growth in the agriculture sector—where more than half of the poor work—has lagged services and industry, constraining the pace of poverty reduction,” the World Bank stated.
This mismatch, it is claimed, has constrained income gains for the most disadvantaged portions of the population, delaying the rate at which economic expansion translates into higher living standards.
Despite the increase in poverty in 2025, the research predicted a modest drop starting in 2026 as inflation continues to fall and macroeconomic conditions stabilize. It said, “Despite elevated poverty levels, a gradual decline is expected from 2026 as inflation continues to ease.”
According to the World Bank, poverty, measured against the national poverty line, is predicted to diminish modestly in the short term and to around 59% by 2028, owing primarily to lower food inflation and moderate economic growth.
However, it warned that the rate of decline would be modest due to structural restrictions such as poor job growth, low agriculture output, and persisting inequality. The research emphasized that economic growth alone will not be sufficient to significantly eliminate poverty unless it is inclusive and job-creating.
It emphasized that changes aiming at improving lives, particularly by increasing access to more productive labor, are crucial to reversing Nigeria’s high poverty rates.
The bank also linked poverty outcomes to larger human capital difficulties, pointing out that poorer households have worse outcomes in nutrition, health, and early childhood development, sustaining long-term inequity.
Speaking at the report’s introduction in Abuja, Fiseha Haile, the World Bank’s Lead Economist for Nigeria, said the country’s poverty rate remains high despite recent macroeconomic improvements, warning that inflation continues to undercut real wages and hinder welfare gains.
Although inflation has decreased in recent years, it still poses a risk to real incomes and slows poverty reduction. Price stability is crucial for improving living conditions.
Haile emphasized the importance of reducing inflation sustainably to combat poverty. He stated that there is a “critical need to bring inflation down… and promote growth and make sure it’s more inclusive, to ensure that citizens… feel the benefits of the macroeconomic reforms.”
He went on to say that poverty reduction in Nigeria would be determined not only by growth but also by the quality of that growth, specifically its ability to create jobs and raise incomes for the most vulnerable.
The economist also identified structural causes of poverty, particularly poor human capital results, and stated that investments in early childhood development are critical to long-term poverty reduction.
He argues that early childhood development is crucial for productivity and poverty reduction.
During a panel discussion at the launch, Wale Edun, minister of finance and coordinating minister of the economy, stated that the federal government is focusing policies aimed at lifting millions of Nigerians out of poverty through investment-driven growth and targeted social support.
Edun stated that the “ultimate goal” of continuing reforms is to “lift Nigerians out of poverty by the millions,” emphasizing that macroeconomic stability alone will not be adequate without increased investment and job creation.
He added that the government’s plan is based on creating a stable and incentivized economic climate that would attract both large-scale and small- and medium-scale investments, which he sees as vital to poverty reduction.
Beyond growth, the minister stated that the government remains committed to protecting vulnerable populations, particularly during periods of rising inflation, and that social safety nets are being extended to mitigate the impact of greater living costs.
“There is still that commitment to have in place a social safety net that helps the poorest, the most vulnerable in particular, to cope with elevated costs,” he stated.
Edun went on to explain that interventions such as direct benefit transfers are being implemented in a targeted manner, with digital platforms linked to national identity systems to ensure that help reaches the intended beneficiaries.
He stated that such social initiatives would be a permanent element of government policy, defining assistance to the poor and vulnerable as needed in “any caring society.”
At the same time, the minister acknowledged the burden of growing expenses caused by global causes, particularly energy and food prices, and cautioned that these developments could have an impact on inflation.
